In a first, online travel company Expedia is planning to open retail outlets for the Indian market. This is a strategy it has not adopted anywhere else worldwide.
However, it is not the first online travel company to have offline presence in India. MakeMyTrip has 54 stores across India. Yatra.com has 23 outlets, including one in Kathmandu, which it refers to as ‘Yatra holiday lounges’.
In a contrast scenario, traditional travel companies like Cox & Kings and Thomas Cook are looking at online as an important tool for growth and remaining relevant. A senior travel industry expert said, “Companies have to go for a hybrid model and have a healthy mix of both online and offline if they want to compete and get a wider market share.”
Expedia’s plans for offline retail outlets may have been triggered by restrictions in the Indian market, including poor broadband penetration and problems related to online payment. While noting Expedia had become a familiar name in the online travel space, Vikram Malhi, the company’s country head, confirmed plans to set up offline retail stores.
According to experts, for online players, ticketing is big business in terms of volumes but not in margins, which come from selling holidays. While customers can easily go online to book a return ticket for packages, many still prefer to have a face-to-face interaction with the travel agent. “We are actively focused on growing the offline business and carefully select serious investors with a passion for the travel industry to partner in retail franchise operations,” said Keyur Joshi, chief operating officer (COO) at MakeMyTrip.com.
For personalised and high value transactions, online travel companies are partnering entrepreneurs at the regional level, largely in tier-I and tier-II cities. “The grass is always greener on the other side. We like their (online) volumes. They like our margins,” said Rakshit Desai, executive director, Thomas Cook India. The company, with presence across 70 cities and 153 owned locations in India, now wants to create its online market in ways that add value to transaction, he said.
While the traditional travel companies have a strong offline presence, the challenge for them is to find the right content for the online platform. “Ours is not a ticketing business. We feel the web is vital for growth and needs to be pushed with right products,” said Karan Anand, COO, Cox & Kings.
With their expertise in packages already in place, these companies want to direct the traveller to make high value purchases with more convenience. “We can have options like order online and pay offline, as customers are often not comfortable using credit cards online,” Desai said.
According to a recently published paper by Thomas Cook India on convergence of travel and technology, 59 per cent of the surveyed respondents visited three or more sites to make a travel purchase and still 51 per cent of people stated they were not able to get enough information online to make an informed decision. “The products are evolving in the online space and consumer demand for information is fast outpacing the developments. Future corporate policy on IT and use of gadgets and connectivity will be driven by employee demand to stay connected and render services,” the paper said.
